Menendez, Pharmacists Celebrate Senate Passage of Legislation to Help Lower Rx Drug Costs for Patients

Menendez, Pharmacists Celebrate Senate Passage of Legislation to Help Lower Rx Drug Costs for Patients

Know the Lowest Price Act is piece of the puzzle to rein in the soaring costs of Rx drugs


WEST NEW YORK, N.J. – U.S. Senator Bob Menendez, a senior member of the Senate Finance Committee that sets national health policy, today joined local pharmacists to celebrate the unanimous passage by the Senate of the Know the Lowest Price Act which would create greater transparency and lower the out-of-pocket costs of prescription drugs by banning insurance companies from issuing “gag clauses” in Medicare drug plans, which prevent pharmacists from discussing cheaper options with their patients, such as paying out-of-pocket instead of using their provider.

“I can’t imagine a New Jersey senior who wouldn’t be outraged to learn that they may often pay more out-of-pocket for their prescription drugs because their local pharmacist isn’t allowed to tell them about a lower cost option,” said Sen. Menendez.  “This common-sense legislation would put an end to ridiculous gag clauses in Medicare prescription drug plans that keep seniors in the dark when they could saving money.”  


In March 2018, the Journal of the American Medical Association (JAMA) released a study that reviewed 9.5 million insurance claims and found 2.2 million of those claims involved overpayments because it would have been cheaper for the patient to pay out-of-pocket instead of paying their copay through their insurance.  It also found that pharmacists are often prohibited from telling their patients that it would be cheaper to pay out-of-pocket than to pay their copay. A 2016 study by the National Community Pharmacists Association, which represents independent community pharmacies, found that 59% of responding pharmacists reported they were prevented by gag clauses from telling their customers about their drugs being cheaper out-of-pocket more than 10 times each month.

As part of the Senator’s work to reduce prescription drug costs and in response to these troubling studies, Sen. Menendez co-sponsored Know the Lowest Price Act, which prohibits gag clauses in Medicare, as well as the Patient Right to Know Drug Prices Act, which targets gag clauses in Affordable Care Act plans as well as plans offered by employers. The latter bill recently passed the Health, Education, Labor, and Pensions Committee, but has yet to come before the full Senate.

“This important bill is a major step forward in promoting price transparency for patients and for pharmacists as they serve them,” said Bill Herlihy, President, New Jersey Society of Health-System Pharmacists. “As pharmacists, we believe patients are best served when they are fully informed of all aspects of their medication therapy, including the financial impact of all therapeutic options available. This bill is an important step forward in realizing this goal. We thank you, Senator Menendez, for your leadership in advancing this important legislation.”


“The gag rules are imposed by Pharmacy Benefit Managers (PBMs), and these PBMs threaten our pharmacy contracts if our patients are made aware of the gag rule,” said Jeff Graciano, a pharmacist at Park Ave. Pharmacy in Weehawken. “There are countless stories of instances where patients end up paying 30, 40 or 50 dollars with their insurance, as opposed to paying $10 or less via cash pricing or other options offered by their pharmacy... With the help of the Know The Lowest Price Act, we pharmacists will finally be able to bring drug transparency that our Medicare patients deserve.”


“The biggest roadblock as pharmacists today is access to medications – mostly due to pricing,” said Ashish Vora, a pharmacist at Park Ave. Pharmacy in Weehawken. “With seniors having a limited income, they too often have to choose whether to take their medication or to forego it. I’d like to thank the senator and everyone who fought for the Know The Lowest Price Act – this provides more transparency for Medicare and Medicare Advantage patients.”


Senator Menendez is also working to pass legislation, the CREATES Act and the SPIKE Act, that would crack down on big Pharmaceutical companies that don’t play by the rules and block cheaper generic drugs from coming to market and require pharmaceutical companies who engage in price-gouging to explain to the public their reasons for hiking the prices of their medications.

“I’m very grateful we have Senator Bob Menendez here to address what is our most important problem,” said Joan Quigley, CEO, North Hudson Community Action Corporation. “Fifty percent of our patients never get the medication that will help them simply because patients cannot afford their medication. In this country, at this time, that’s a disgrace. And there is one person fighting hard to change that situation, Senator Bob Menendez.”

The bipartisan Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act would crack down on drug companies that intentionally delay the required sharing of product samples with generic manufacturers to develop generic versions of the brand-name drug.  Under the bill, the branded pharmaceutical company could be held civilly liable and subject to damages for not providing samples in a timely fashion.

The Stopping the Pharmaceutical Industry from Keeping Drugs Expensive (SPIKE) Act  would require pharmaceutical companies who engage in price-gouging to explain to the public their reasons for hiking the prices of their medications when those increases exceed a certain benchmark. Under current law, drug manufacturers are not required to publicly report their price increases and there are no deterrents for price spikes. Specifically, it would apply to the most expensive medicines that have seen increases of over 15% in a year or 50% in five years, and drugs costing at least $10 per dose that have doubled in price within a year or tripled within five years. The bill calls for the Centers for Medicare and Medicaid Services (CMS) to publish each submission, together with an easily understandable summary, on its website. Manufacturers that fail to comply would be subject to civil monetary penalties.   

Late last month, he held a roundtable with New Jerseyans with chronic illnesses struggling to afford their lifesaving medication and discussed the bills he is working to pass.